America’s Perfect Storm Irwin Kirsch ETS ABE Summer Institute St. Cloud, MN August 5, 2009

11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Three Forces Are Changing Our Nation’s Future The continuing evolution of the economy and the nation’s job structure, requiring higher levels of skills from an increasing proportion of workers Inadequate literacy and numeracy skills among large segments of our student and adult populations An ongoing shift in the demographic profile of our population, powered by the highest immigration rates in nearly a century 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

A Changing Economy 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Mean task input as percentiles of Changes in the Demand for Workplace Skills 40 45 50 55 60 65 1960 1970 1980 1990 2000 Routine Manual Nonroutine manual Routine cognitive Nonroutine interative Nonroutine analytical Mean task input as percentiles of the 1960 task distribution Source: Levy and Murnane, The New Division of Labor 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

What are the new basic skills? Non-Cognitive ICT Problem Solving Cognitive 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

change in millions of adults Jobs associated with college-level skills and education accounted for two-thirds of the job growth between 1984 and 2000. Occupational group 1984 millions 2000 Absolute change in millions of adults Percentage change All 16+ 105.0 135.0 30.0 29.0 High literacy 34.0 54.0 20.0 57.0 Moderate literacy 70.0 80.0 10.0 14.3 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

change in millions of adults Jobs requiring high levels of education and skills are projected to account for almost half of the job growth over the next decade. Occupational group 2004 millions 2014 Absolute change in millions of adults Percentage change All 16+ 146.0 165.0 19.0 13.0 High literacy 49.0 58.0 9.0 18.0 Moderate literacy 97.0 107.0 10.0 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

The expected lifetime earnings of males have changed dramatically between 1979 and 2004 resulting in a growing inequality favoring those with higher levels of education. Educational Attainment 1979 (millions) 2004 Percentage change No HS diploma or GED 1.5 .96 -39.0 HS diploma or GED 1.8 1.4 -23.0 1-3 years of college; AA degree 2.0 1.7 -13.0 Bachelor’s degree 2.736 2.702 -1.2 Master’s or higher degree 3.0 3.5 15.0 All 1.879 1.902 1.2 Educational Attainment 1979 2004 HS vs. College 50% 96% College vs. Grad. 11% 30% HS vs. Grad 67% 254% 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Wage and salary earnings reflected a shared prosperity through 1975 Wage and salary earnings reflected a shared prosperity through 1975. Between then and now we have seen a growing inequality. Percentage Change in Earnings Since 1961 Tabulations of annual March Current Population Survey Data, by David Ellwood, Harvard University. 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Inadequate Skill Distributions 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

National Adult Literacy Survey (NALS, 1992) Literacy surveys conducted by ETS have represented literacy along scales divided into 5 levels. National and international committees have judged that skills in Levels 3 and higher are needed for participation in modern societies. National Adult Literacy Survey (NALS, 1992) Less Proficient More Proficient 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Literacy skills are related to level of educational attainment 350 336, graduate degree 322, 4-year degree 308, 2-year degree Level 3 300 294, some college 270;268, HS Diploma; GED Level 2 250 231, 9-12 years of schooling Level 1 200 177, 0-8 years of schooling < Level 1 150 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Adults in Levels 3 and higher had a better than 90 percent chance of passing the GED. 98 88 Percentage- Passing GED 58 27 ** Level 1 Level 2 Level 3 Level 4 Level 5 SOURCE: The Literacy Proficiencies of GED Examinees: Results from the GED-NALS Comparison Study. (1995). Baldwin, J., Kirsch, I., Rock, D., & Yamamoto, K. 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Mean Prose Proficiencies of Employed U. S Mean Prose Proficiencies of Employed U.S. Adults and Their Percentile Ranks on the International Prose Distribution, by Major Occupational Group Occupational Group Mean Score Percentile Rank on International Scale U.S. Rank Among 19 High-Income Countries Managers and professionals 316 77nd 3rd Technical and associated professionals 313 76th 2nd Clerical and administrative support 291 62nd 10th Service and lower-level sales 269 46th 15th Craft workers 245 31st 16th Assemblers and operatives 244 13th (tie) Laborers and agricultural/fishery workers 242 30th Source: IALS Survey. 1994 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Percentage of Adults 16-65 Years Old at: Half of America’s adults lack literacy skills needed for the 21st century. Percentage of Adults 16-65 Years Old at: Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 Levels 4/5 Levels 4/5 All Adults Asian Black Hispanic White 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

High School Graduation rates peaked at 77% in 1969 and have remained in the 70% range since 1995. Graduates as a Percentage of 17-Year-Old Population Graduates are of regular day-school programs. Source: U.S. Department of Education, National Center for Education Statistics 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Reading scores have remained flat since the release of A Nation at Risk report in 1983. Math scores have fared only slightly better than reading. NAEP Assessment Years Reading 1984 1990 1996 2004 Age 13 257 258 259 Age 17 289 290 288 285 Math 1986 1992 269* 273* 274* 281 302* 307 * Significantly different from 2004 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Average achievement gaps in both reading and math have remained stubbornly unchanged. 1984 1994 2004 White-Black Age 13 26 31* 22 Age 17 32 30 29 White-Hispanic 23 30* 24 27 33 Math 1986 1996 28 19 25 21 * Significantly different from 2004 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

U.S. Rank Among 29 Countries The U.S. is not among the world’s leaders in any area of educational achievement. Math Reading Science U.S. Average Score 483 495 491 OECD Average 500 494 U.S. Rank Among 29 Countries 24th 15th 20th 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

The Percent of Adults with an Associate’s Degree or Higher in the US and Other OECD Countries Source: OECD Education at a Glance 2005 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

What these and other data tell us is that America no longer leads the world in terms of high school graduation rates or in terms of acquired skills in key areas of achievement. And, we are losing ground in terms of the percentages of our graduates who go on to attain a post-secondary degree. “In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity - it is a pre-requisite.” President Barack Obama, February 2009 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Shifting Demographics 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

America’s labor force will grow more slowly over the next 20 years, with almost none of the growth expected to come from native-born workers. Growth 1980-2000 Growth 2000-2020 Natives, 25-54, All races 26.7 0.0 Natives 55+, All races 2.7 13.3 Immigrants 9.3 6.0 TOTAL 38.7 19.4 Numbers represent millions of adults 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Immigration is projected to account for more than half of our population growth between now and 2015. Time Period Population Growth (millions) Net International Migration Net Immigration as a Percentage of Population Change April 2000 – July 2005 (Actual) 15.0 6.3 42 2005–2010 Projected 13.4 6.7 50 2011-2015 Projected 7.1 53 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Immigration patterns have changed dramatically over the past 100 years Immigration patterns have changed dramatically over the past 100 years. New immigrants to the U.S. are quite diverse with respect to their country of origin. 100% 80% Asia Central/South America 60% Proportions Canada Europe 40% Australia and New Zealand Africa 20% 0% 1820–1940 1951–60 1971–80 1991-96 Years 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Educational Attainment Between 2000-2004 new immigrants 18 years of age and older entered the U.S. with a broad range of educational backgrounds Educational Attainment Number (millions) Percentage 1-12 years, no diploma 1.7 34 high school diploma or GED 1.1 23 13-15 years .8 15 Bachelor’s degree 17 Master’s or higher degree .6 11 Total 5.0 100 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Educational Attainment Master’s or higher degree 44% of births to women under 30 are out of wedlock. The majority of these births take place among women with either no high school diploma or no postsecondary education Educational Attainment Total Births Out-of-Wedlock Percentage Out of Wedlock <12 or 12, no diploma 563,288 350,847 62.2 12 years, diploma or GED 743,151 381,060 51.3 13-15 Years 666,328 242,920 36.7 Bachelor’s degree 268,238 33,669 12.6 Master’s or higher degree 62,313 2,691 4.3 All 2,298,318 1,011,077 44.0 Source: 2004 American Community Surveys; public-use files; tabulations by authors. 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

What might the future look like? 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Distribution of Literacy Scores Found in the National Adult Literacy Survey (1992) 70 million adults in levels 1/2 Less Proficient More Proficient 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Average literacy scores are expected to decline between 1992 and 2030, with an increase in the amount of inequality. 70 million increase to 119 million in 2030 Less Proficient More Proficient Less Proficient More Proficient 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

The Need for a New Human Capital Agenda “…every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country - and this country needs and values the talents of every American.” “by 2020, America will once again have the highest proportion of college graduates in the world.“ President Barack Obama, February 2009 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Percent among adults who are now 36-43 years old Reading and math scores in high school have a strong influence on the likelihood of completing 16 or more years of schooling. Percent among adults who are now 36-43 years old Decile All Men Women White Black Hispanic Total 26.46 25.77 27.18 30.25 14.92 14.57 2nd decile 2.20 1.73 2.72 0.67 4.26 2.60 4th decile 8.84 6.40 11.04 6.26 15.07 12.94 6th decile 15.35 9.01 20.95 13.61 26.54 19.91 8th decile 32.75 31.49 33.98 33.05 44.13 10th decile 76.15 75.76 76.72 76.53 72.13 79.47 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

President Obama noted in his State of the Union address: “I reject the view that says our problems will simply take care of themselves; that government has no role in laying the foundation for our common prosperity.” “We are a nation that has seen promise amid peril, and claimed opportunity from ordeal.” 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

Our history reminds us that at times of economic turmoil and transformation, our nation has responded with big ideas and bold action. In response to the Industrial Revolution we developed the best free public education system in the world. We also created the world’s best system of colleges and universities and after World War II, through the GI Bill, educated a generation which helped create the most educated and productive workforce in the world. This workforce put a man on the moon and helped develop an explosion of technology that still shapes our world. 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

what will happen, but give us the determination Let us not be content to wait and see what will happen, but give us the determination to make the right things happen. — Horace Mann I 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

For more information contact: Irwin Kirsch ETS Princeton, NJ 08541 e-mail: ikirsch@ets.org Office: (609) 734-1516 www.ets.org/stormreport 11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.

11/24/2018 Confidential and Proprietary. Copyright © 2007 by Educational Testing Service. All rights reserved.